KARACHI, March 12: Easier conditions prevailed on the cotton market on Saturday as prices eased from the recent highs amid falling mill demand owing to problems on the yarn export front. Market sources said larger unsold stocks of cotton yarn had created liquidity problem for spinners limiting their buying capacity and higher lint prices was another inhibiting factor.

After having fallen sharply lower from the all-time peak levels, New York cotton futures on the other hand recovered from the mid-week lower levels on the revival of fresh speculative support, they said.

Both the ruling May and the distant July contracts were quoted higher by 3.96 and 2.66 cents per lb at 204.94 and 193.25 cents respectively. They remain well below the intra-session highs of 207.95 and 197.09 cents.

Analysts said prices may not ease from the current high levels as leading speculators indulged in selling at the higher levels and buying at the dips on the futures market keeping the consumers at their toes all the time.

They said short crop in some of the leading producers including Pakistan and China though has accentuated the supply position but speculative activity is the chief cause behind the global price flare-up.

Official spot rates were marked down by Rs300 per maund at Rs12,700 but buyers remained conspicuous by their absence citing liquidity problems caused by the production glut of unsold cotton yarn.

Mill ready offtake, therefore, remained at a low ebb as only 200 bales, from Khairpur and 1,000 bales, from Haroonabad changed hands at Rs12,800 and Rs12,500 respectively.